Third Circuit Rules A Paid Suspension Is Not An Adverse Employment Action

On August 12, 2015, the Third Circuit ruled that a suspension with pay does not constitute an adverse employment action within the meaning of Title VII of the Civil Rights Act of 1964 (Title VII) and the Pennsylvania Human Rights Act.  Title VII prohibits employers from “failing or refusing to hire, discharging, or discriminating against any individual with respect to compensation, terms, conditions, or privileges or employment, because of such individual’s race, color, religion, sex, or national origin.”  In Jones v. SEPTA, the plaintiff was suspended with pay in December 2010 by her employer, Southeastern Pennsylvania Transportation Authority (“SEPTA”) for apparent timesheet fraud.  After a lengthy investigation by SEPTA’s Office of Inspector General, the plaintiff was suspended with pay in February 2011, and formally terminated in April 2011.  In her complaint, the plaintiff alleged her termination was the result of years of unlawful sexual harassment, gender discrimination, and retaliation.  The District Court ruled for SEPTA and the plaintiff appealed.

On appeal, the Third Circuit agreed with the District Court’s finding that the plaintiff was unable to show that she suffered from an adverse employment precisely because paid suspension does not constitute an adverse action under Title VII.  The suspension neither changed compensation nor did it effect a “serious and tangible” alteration of the “terms, conditions, or privileges of employment.”  Thus, suspension with pay, without more, is not an adverse employment action under the substantive provision of Title VII.  Prior to this case, the Third Circuit had not decided the issue of paid suspensions.  Other federal circuit courts, however, have unanimously reached the same conclusion that placing an employee on paid administrative leave, where there is no presumption of future termination, does not constitute an adverse employment action.

The Third Circuit also held that both instances of the plaintiff’s suspension, paid and unpaid, failed to establish a violation of Title VII.  Moreover, because the suspension and subsequent termination were based on fraudulent activity by the employee and the organization’s investigation of the same, there was no causal relationship between her gender and the treatment by SEPTA.  Despite additional allegations that she was a victim of a hostile work environment, the plaintiff had not sought to employ any of the safeguards or other means of protection provided by SEPTA to formally file a complaint prior to the accusation of fraud.  As such, SEPTA was not be liable for informal or nonexistent claims of a hostile work environment.

Employers’ Takeaway:

• Suspensions with pay do not constitute an adverse employment action and, therefore, are not viable claims under Title VII.
• Employers should ensure that any suspensions or leaves of absences do not alter compensation or any terms, conditions, or privileges of employment.

For more information regarding this decision and best practices, please contact John C. Petrella, Director of the firm’s Employment Litigation Practice Group at jpetrella@genovaburns.com or Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@genovaburns.com or 973-533-0777.